Home » EU Omnibus I Finalized: Comparing Key Structural Changes to the CSRD and CSDDD

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EU Omnibus I Finalized: Comparing Key Structural Changes to the CSRD and CSDDD

This blog was originally posted on 6th March, 2026. Further regulatory developments may have occurred after publication. To keep up-to-date with the latest compliance news, sign up to our newsletter.

BY HANNAH JANKNECHT , SENIOR REGULATORY SPECIALIST, COMPLIANCE & RISKS

Precisely one year after the European Commission proposed the “Omnibus I” simplification package, the finalized amendments to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) were published in the Official Journal of the European Union on 26 February 2026 (Directive (EU) 2026/470).

While the general objectives of corporate transparency and accountability are maintained, the new framework revises the reporting thresholds, implementation timelines, and specific compliance obligations of both Directives.

Key Updates to the Corporate Sustainability Reporting Directive (CSRD)

Scope and Timeline

2024 – 2026

For financial years beginning between 1 January 2024 and 31 December 2026 inclusive, large public-interest entities with an average of more than 500 employees remain subject to CSRD reporting requirements, provided they are not exempt under the national laws of their established Member State.

For financial years starting between 1 January 2025 and 31 December 2026, Member States are permitted to grant exemptions to companies that will no longer fall within the Omnibus-adjusted scope starting in 2027. This provision is intended to prevent entities from being required to implement reporting systems for a limited duration of only one or two years if they do not meet the new permanent thresholds (€450 million annual net turnover and 1,000 employees). However, as the application of these exemptions remains at the discretion of individual Member States, it is crucial that companies closely monitor national CSRD implementations.

After 2026

For financial years beginning on or after 1 January 2027, the reporting thresholds as modified by the Omnibus amendment will take full effect. The CSRD requirements only apply to public and non-public companies that meet the following criteria:

A minimum average of 1,000 employees during the financial year; and
An annual net turnover of at least €450 million.

Effective for financial years starting on or after 1 January 2028, EU-based subsidiaries and branches will be required to provide sustainability reports covering their third-country (non-EU) parent undertaking. While the timeline for this has not changed, the thresholds have been adjusted by the Omnibus amendment. The obligation now applies if:

The third-country parent generates an annual net turnover exceeding €450 million within the European Union; and
The group has at least one EU subsidiary (meeting large-undertaking criteria) or an EU branch that independently generates a net turnover exceeding €200 million.

Content Changes

Directive (EU) 2026/470 amends the CSRD reporting framework by updating the European Sustainability Reporting Standards (ESRS), eliminating the requirement for sector-specific standards, and adjusting assurance requirements. Additionally, it introduces a new value-chain cap for protected undertakings.

Requirement	Pre-Omnibus Amendment	Post-Omnibus Amendment	Related CSRD Article
Voluntary Reporting Standards	Voluntary VSME standard for non-listed small and medium-sized companies (Commission Recommendation (EU) 2025/1710).	Voluntary Reporting Standard for all companies that are no longer directly in scope of the CSRD. Intended to be proportionate to the capacities, characteristics, scale, and complexity of these specific undertakings. To be established via COM Delegated Act by 19 July 2026.	Article 29 ca
Value-chain cap	No strict value-chain cap. Sustainability reporting standards may not require undertakings to report information that would require them to obtain information from small and medium-sized undertakings in their value chain that goes beyond the content of the standard for listed SMEs.	Strict value-chain cap. Companies in scope of the CSRD are prohibited from requiring information from ‘protected undertakings’ that exceeds the content of the voluntary sustainability reporting standards (to be adopted by the Commission). ‘Protected undertakings’ are those undertakings in a reporting company’s value chain that do not exceed an average of 1,000 employees during the preceding financial year. Protected undertakings have a statutory right to refuse to provide any information that goes beyond these established limits. If a reporting company chooses to request information beyond these limits, it must explicitly inform the protected undertaking of the specific extra information requested and their legal right to decline.	Article 29 ca and c
European Sustainability Reporting Standards (ESRS)	ESRS adopted on 31 July 2023 in Regulation (EU) 2023/2772. 12 ESRS (2 cross-cutting, 5 environmental, 4 social, 1 governance).	The Omnibus amendment mandates COM to develop simplified and reduced ESRS. The revised ESRS must be finalized by 18 September 2026. The draft revised ESRS were submitted by EFRAG to COM on 3 December 2026. Key changes:61% reduction in mandatory datapointsVoluntary disclosure points removed from mandatory standardsSimplified DMA, Executive summaries, Transitional reliefs, broader use of undue cost or effort principle COM intends to apply the revised ESRS for FY beginning on or after 1 January 2027, and is considering an option for early adoption in 2026. Learn more about the content of the draft revised ESRS here.	Recital 18
Sector-specific standards	Sector-specific standards for high-risk sectors by 30 June 2024 (incl. Oil & Gas, Textiles, Automotive).	Mandatory sector-specific standards removed from amended CSRD text. Possibility for sector-specific guidance based on company demand.	Article 29b(1)
Assurance	Companies must obtain an assurance opinion on the sustainability statement. Limited assurance standards to be adopted by the EU Commission by 1 October 2026. Reasonable assurance standards to be adopted by the EU Commission by 1 October 2028 (after feasibility assessment).	Companies must obtain an assurance opinion on the sustainability statement. Limited assurance standards to be adopted by the EU Commission by 1 July 2027. In the meantime, companies and auditors can refer to CEAOB limited assurance guidelines from September 2024. No transition to reasonable assurance.	Article 26a
Member State Transposition	Original CSRD to be transposed by 6 July 2024. Existing implementations to be amended to incorporate Omnibus changes.	Omnibus Content amendment Directive (EU) 2026/470 to be transposed by 19 March 2027.	Article 5 of Directive (EU) 2026/470

Key Updates to the Corporate Sustainability Due Diligence Directive (CSDDD)

Scope and Timeline

Based on the changes made by Directive (EU) 2026/470, the following companies are now required to comply with the CSDDD:

EU companies:

5,000 employees + >€1.5B worldwide net turnover
Ultimate parent of group meeting the above thresholds
Franchising/licensing enterprise with >€75M EU royalties + >€275M worldwide turnover

Third-country undertakings:

€1.5B net turnover in the EU
Ultimate parent of group meeting the above threshold
Franchising/licensing enterprise with >€75M EU royalties + >€275M EU turnover

The deadline for compliance with the due diligence requirements was moved from 26 July 2027 to 26 July 2029. First CSDDD website reports based on Article 16 are due for the financial year starting on or after 1 January 2030.

Content

Directive (EU) 2026/470 made changes to the way companies identify, assess and handle risks and adverse impacts based on Article 8, 10 and 11 of the CSDDD. The amendment furthermore changed how often companies are required to re-assess their due diligence system, and it removed the requirement to adopt and implement climate transition plans.

Requirement	Pre-Omnibus Amendment	Post-Omnibus Amendment	Related Article
Level of harmonization	Member States are prohibited from diverging from human rights and environmental due diligence obligations specifically in Articles 8(1), 8(2), 10(1), and 11(1).	Member States are prohibited from diverging from a wider range of articles, including Articles 6, 8, 9, 10(1)-(5), 11(1)-(6), and 14 to 16.	Article 4
Identifying adverse impacts	Companies must implement a risk-based due diligence framework (Articles 7–16) integrated into their internal policies and risk management systems. Companies are required to map their supply chain, identify high-risk areas and conduct detailed evaluations specifically within those identified high-risk areas.	Companies must implement a risk-based due diligence framework (Articles 7–16) integrated into their internal policies and risk management systems. The amendment replaces the mapping of operations with a ‘scoping exercise’ based solely on reasonably available information to find areas where impacts are most likely or severe.	Article 8
Value-chain cap	No value-chain cap.	Companies are not allowed to request information from business partners with fewer than 5,000 employees unless the information cannot be obtained by other means.	New Article 8 (2) a
Terminating business relationships	If negative impacts cannot be mitigated, the company is required to temporarily suspend or, as a last resort, terminate the business relationship.	The amended CSDDD contains a stronger emphasis on ‘suspending’ the business relationship until the negative impact is mitigated. Continuing to engage with a partner while an enhanced action plan is in place shall not expose the company to penalties or liability.	Article 10 and 11
Monitoring and re-assessment frequency	Effectiveness assessments have to be conducted every 12 months.	Effectiveness assessments must be conducted at least every five years or, without undue delay following any significant operational changes. Furthermore, an immediate re-assessment is necessary whenever there are reasonable grounds to believe that existing measures have become inadequate or when new risks of adverse impacts have been identified or are anticipated to arise.	Article 15
Climate Transition Plans	Companies are required to adopt and put into effect a transition plan for climate change mitigation.	Requirement removed	Article 22 (removed)
Harmonized Liability	Member states are required to set up a harmonized liability system based on Article 29.	Requirement for harmonized liability removed. Non-harmonized member state liability legislation applies. No requirement for member states to provide standing to NGOs and trade unions.	Article 29
Penalties for non-compliance	Detailed penalty-provisions to be defined in member state law. The maximum penalty limit is set at not less than 5% of net worldwide turnover.	Detailed penalty-provisions to be defined in member state law. The maximum penalty shall not exceed 3% of the company’s net worldwide turnover. The Commission is required to issue guidance to help national authorities determine penalty levels.	Article 27
Guidelines	COM to adopt model contractual clauses by 26 January 2027. COM to adopt the first set of guidelines by 26 January 2027.	COM to adopt model contractual clauses by 26 July 2027. COM to adopt the first set of guidelines by 26 July 2027 (followed by additional guidance by 26 July 2028).	Article 18 and 19
Member State Transposition	Member states are required to transpose the CSDDD into national law by 26 July 2026.	New transposition deadline: 26 July 2028	Article 5 of Directive (EU) 2026/470

Adapting to New Thresholds and Global Standards

Given the significant narrowing of scope under the Omnibus Directive, companies should re-assess and verify their status against the revised thresholds and, if now exempt, consider pivoting to reporting under the upcoming voluntary standards to maintain competitiveness.

Large firms may need to update procurement policies and questionnaires to account for the new “value chain caps” that limit data requests from smaller partners. It is also crucial to stay vigilant regarding national transpositions, which set out penalty provisions (e.g. up to 3% of net worldwide turnover under the CSDDD), and possible CSRD exemptions for the current reporting year.

Finally, as other jurisdictions (such as the UK, Australia, Brazil, and various APAC countries) rapidly adopt ISSB-aligned disclosure rules and business and human rights frameworks, companies should look beyond the EU to align their reporting strategies with these emerging global standards and ensure interoperability across their international operations.